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Coin hoard or coin collection?

by Björn Schöpe

May 17, 2012 – To some people coin collecting might seem suspicious, however, it is not really accusable. But is coin collecting the same as coin hoarding? It depends. Questions like this will be currently in the centre of heated discussion in the Philippines. But one by one.

Things started when Senator Manuel ‘Lito’ Mercado Lapid noticed that in his country a remarkable mass of coins is issued. On average there should be 184 coins per citizen, quite much compared with other Asian countries where only 100 coins per person are struck.Particularly the National Bank (BSP) complained about repeated shortage of coins in circulation. This is an indication that not all issued coins get or stay into circulation but are hoarded. Doing this to a considerable extent hoarding harms the economy. Especially because four coins have a higher intrinsic than face value, the danger that they may be melted down being thus withdrawn from circulation, is rather high.

‘Candies’ are not expected to become a ‘legally’ recognised value, as Senator Lapid acknowledges. However precautions have to be taken since there is a certain threat in this direction. Hence on 9 May 2012 he has proposed the bill for ‘An Act Defining the Crime of Coin Hoarding and Providing Penalties Therefor’ (no. 3171).Coin Hoarding is defined as ‘when a person or entity is in possession of coins of legal tender issued by the Bangko Sentral ng Pilipinas (BSP), beyond the requirements of his regular business as may be determined by the BSP’. In addition, ‘when required by existing BSP circulars on legal tender, business shall be transacted only with coins of Philippine currency and any transaction to the contrary shall be considered coin hoarding under this Act’. Thus we are talking about penalties: one year imprisonment and a fine of 100,000 Philippine Pesos (currently c. US$2,314) for every 1,000 pieces of coins hoarded or a fraction thereof.’

Is collecting the same as hoarding? Basically collecting as a hobby and filling one’s piggy bank is permitted as the text makes clear. But there is one condition: If BSP determines a coin shortage all coins have to be surrendered within one month. Otherwise the coins will be considered as hoarded (being a crime).

Some questions remain. The coin with the highest face value is a 10 pesos piece (US$0,23). If required by the BSP, ‘business’ has to be transacted exclusively with coins. Lucky who has the necessary change at hand when purchasing a new car. Not to speak of the really huge and generally cash-free ‘business’ acts.What shall we think of this bill? A populist approach? At least Senator Lapid presents himself as a man of the people. His ‘biography’ however, does not reveal his life. He describes himself as a ‘testament to a working democracy’, considering himself (as it seems) ‘a person with little formal education’ who has had success in the middle of a higher class. His ‘biography’ closes with the flowery phrasing: ‘Despite the unfair imputations against his competence, he has successfully struggled towards becoming one of the more productive legislators, slowly dispelling one criticism after another to distinguish himself as a dependable leader, a scholar of worthwhile ideals, a gentleman for the masses and a warrior for social responsibility.’

Probably you have to propose bills like that in order to become one of the ‘more productive legislators’ of the Philippines. It remains to be seen if the other senators as well hope to solve the coin shortage with this kind of acting – or if they only try to exploit a new financial source for the state. When you ask how easily people might be accused of coin hoarding, the last sentence of the bill takes one to conjecture the worst: ‘Coins subject of the hoarding shall be forfeited in favor of the government.’